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What Kind Of Dividend, Buyback Should Investors Expect From Apple Next Week?

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Apple Inc. (NASDAQ: AAPL) is set to announce its quarterly results next week and investors are expecting the company to announce an increase in dividend and also an increase in share buyback.

Citi technology analyst Jim Suva was recently on CNBC to discuss what investors should expect from the company and if the expectations are already factored in prices.

Dividend And Buyback Increase

"Actually, we quantified this and we believe they are going to increase the dividend by at least 10 percent (that’s a week from today) as well as increase their stock buyback from $90 billion to a $120 billion to deploy that," Suva said. "Now that still puts them interestingly in a position where still having over $20 of cash per share."

He continued, "So, they will still be able to grow out there and make acquisitions, grow their headquarters, increase their employee base and continue to innovate because that’s the key, but again a 10 percent dividend increase and increase their stock buyback from $90 billion to $120 billion."

Related Link: Apple Will Smash Street Estimates Of 54 Million iPhone Sales

Factored In Expectations

Suva was asked if his projection of 10 percent dividend increase and a $30 billion increase in stock buyback is already priced in the stock. He replied, "I think it's pretty much in-line now with expectation. The stock has had an incredible run during the past year or two and I think investors are becoming accustomed to now. Apple is a cash flow machine. They have too much cash, that’s a good problem. They can give more back to shareholders.

"So, investors are indeed expecting a dividend increase and a stock buyback."

Latest Ratings for AAPL

Jan 2017OTR GlobalDowngradesNegative
Jan 2017GuggenheimInitiates Coverage OnBuy
Dec 2016PiperJaffrayAssumesOverweightOverweight

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Posted-In: Citi Jim SuvaAnalyst Color CNBC Analyst Ratings Media


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